Earnings call transcript Q1 2023

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Operator

Good morning. And welcome to the Sanara MedTech Inc.

First Quarter 2023 Results and Business Update Conference Call. [Operator Instructions]

I’d now like to turn the call over to Callon Nichols. ahead. go Please

Callon Nichols

XXXX yesterday good to and quarter I'd to have earnings like March to would Thank that highlight MedTech's morning, earnings you we release our issued Sanara posted XXXX. ended XX-Q a the And available our the copy are conference welcome This today's earnings I XX, like you, Investor March for deck supplemental release of on page We the Form everyone. the of quarter year as afternoon. call ended XXst, deck and page. this Relations website. for well on as

We in information our will reference remarks this today.

XX Ron Executive Q&A. for to expect prepared McNeil, allow Officer, Mike We Chairman; approximately Zach financial Nixon, Officer; comments minutes and Fleming, Chief from time Chief today's last Executive to

this conference within forward-looking include and Litigation Reform XXXX. call supplemental press Act the Securities in statements our in release Private statements of Certain in and deck, the of meaning our

involving cause For statements projected more information report forward-looking please from by results vary or that actual see factors implied those recent XX-K. forward-looking and materially about on most annual the statements, to risks and our uncertainties Form could

to over to the I'd turn Ron. Now like call

Ron Nixon

good in Callon. period. XX% morning. XXXX you, $XX.X QX million And Thank from the generated net Sanara a representing year revenue In increase prior

in first of company's the month was history. another XXXX highest record was the quarter The sales quarter March for Sanara and

product, from discuss increased QX at out to in accelerate products which Allocyte see Scendia as to from as sales licensed detail the flat later. us a due QX continued from We strong we'll stock greater and Biotech. were growth we of well to Cook Sales sales

premarket Multispectral in period. liabilities. notification that XXXX, Solution. $X.X of (k) Zach prior quarter, Precision million will into $X.X XXXX. more Subject was a BIASURGE’s our for earnout out to go product, to net we change the XXX(k) driven the believe we a sales the company a This detail year XXX a On by the was it's compared fair value team The component March an million, of end earn submitted loss developed higher of FDA a net at strategy. our received our Imager. Surgical is by Rochal of for and the our in had company loss Lower of on for loss but clearance of the based to Advanced Healing which critical to commercially imager's expected capabilities, value XX, launch

an agreement call, mentioned on Fitzgerald Cantor the two first for of this our in capital We agreement stock. with into quarter As ATM purposes. our for a we previous offering into sales we entered entered

received was for to we for products clinical and and first technology to this as raise proceeds second the to and acquisitions, salesforce was of use expansion our further intend as of potentially and the pipeline, purposes. to studies, partnerships net common opportunistic acquisitions, fund stock. The increase currently corporate We well capital the offering general development liquidity from our

million in chose when trading over could $X QX. were board determined end management of proceeds. the we our net appropriate. course the the the and to it's and of quarter, and received if the XX we During reactivate Sales days, at ATM utilize paused approximately potentially ATM, We

Fleming detail. Zach like to Now you. business I'd to ask more our in Thank discuss

Zach Fleming

Ron. Thanks,

existing our areas. strong new expanding to generate team Our surgical sales customer into penetrating also base continues geographic and growth, sales further into

in as XX over ended states. XX surgery our And centers facilities. sold March be months of and across the XXXX, X,XXX products over During approved trailing our products were to XX, contracted March hospitals XXX were XXXX, in or ambulatory XX, sold

donor Allocyte supply screening donor issues impacted amount tissue was continued qualifying of quarter, product first we significantly to to eligible line. the experience with due In the requirements. The

to unable the fill second During negatively the were issues a of supply first resolution our this for half anticipate We until certain XXXX, this would that shorten at though not full product impacted timeline. XXXX, of do which orders are looking quarter continually options the sales. of we we

the surgical of As bags. issues mentioned late impacted clearance timing to FDA XXXX. to we the supply has plan launch quarter, in subsequent We launch BIASURGE, for cleanser. The product the received of end Ron by this related exact to our sterile been

currently manufacturing plan. developing We and scheduling our marketing are runs

our multispectral imager. to Turning

submitted and based allows wound. before, wound, record multispectral is digitally to said and a view view fluorescent the this wound clinicians view images and and wound, strategy of and white record care. have digitally when measure part an value and light we excitation imager thermal our a of key record of of a As a targeting light, images digitally size The from of digitally a record to exposed images

With is start data, and develop wound place these pieces can clinicians of to to understand appropriate begin a what in care plan. taking an

analytics company predictive Additionally, use suggest treatment expects it will able over time, to the as be plans. collected, data more and appropriate to more are

summary, we plan first on In through the are quarter.

our of specialties to and we are expand two training. and upskilling call our focus, are adding team continuing We are evaluating distribution, always and into patterns, including we new the performance

And continually are to evidence will XXXX. achieve will we us our believe us that more are and for separate We additional from gaining continuing approvals, help that add we studies goals competition. clinical

review our I'll turn to McNeil financials. Mike that, over With it to

Mike McNeil

Thank Zach. you,

the generated the XX, XX% March $X.X ended revenues a XXXX. in period. March prior to revenues quarter XXXX were quarter compared the expenses the XXXX, ended ended Scendia XX, for March million of the $XX revenues year for same Sanara first net net million period million the Net included to of of XX, for $X $XX.X million, million from SG&A increase $X.X sales. XXXX, XXXX, For for quarter quarter of compared

higher direct increase primarily included QX marketing compared costs to expenses higher for Our million, first to $X.X in of $X.X XXXX or XXXX. XX% the of which The accounted and expenses quarter were SG&A to SG&A of related Scendia due sales operations. expenses, million approximately

an of to $X.X commissions and increased support. sales The higher a increase operational million attributable direct result in of were expansion as $X.X and sales higher sales salesforce product primarily and marketing of costs to expenses million related

expenses We of percentage and sales to as continue expansion growth overhead. salesforce expect SG&A decline outpaces as our to a net corporate costs revenues of our

R&D to to the XXXX the skin A for due primarily million costs LFA value to $X.X million our ended were March wound Healing related in fair XXXX. the change expenses patient Precision for of were in XX, adjustments the period compared in and higher conditions. for discount value XXXX ended for expenses $X.X the Imager as in same Multispectral assessing resulted quarter and amounts projected The R&D to models, the our timing earnout liabilities a of factor to change quarter the March decrease projected in made. to was The XXXX. the a valuation the a in utilized well due in be to million decrease of $X.X XX, paid, payments the as benefit in be fair

XX, of XXXX, three the the March loss $X.X million XXXX. $X.X ended months net had we of to loss first compared for For million a quarter net a of

cash XX, XXXX, $X.X hand million. on at Our was March

With turn that, I'll closing Ron for it remarks. back to

Ron Nixon

Thank you, Mike.

distribution of as line continue products our we well surgical As Cellerate we've product as we to the through growth non- that network. our Cellerate our addition market advance the of discussed,

That XXX Operator, So submission innovation to far look ready the area have. concludes XXX call remarks our answering in may the with any imager advancement of forward open for we XXXX we our (k) continued in you for questions for (k) the and and have questions. we're BIASURGE. clearance to

Operator

Instructions] [Operator

first with question Osborn coming is Your Ross from Fitzgerald. Cantor

Ross Osborn

addressed. for have of commercialization Hi been walk level demand a in plan of juggling guys, in on the couple to apologize and and calls case BIASURGE upon I congrats could off, inventory quarter But the have these order you you just I've been starting meet launch. through

Zach Fleming

that question. Sure, can yes, I take

meetings daily. Of course, we're that having on

of do What plan a not we doctors can that product available do get some they have us is will we're feedback. sale. we doing the product is so give trials current and Our some, preview with for

this need they'll going kind but gain then are We the in essentially a be because go and we're we to that tack will our do Essentially to on team approvals. believe We to approvals. year, very vendor. this will product respect have with available Cellerate we able when product to team out contracts training to the becomes there approved the similar that the those optimize It launch attack. to of late will plan,

You vendor can the there hospital. oftentimes. then And start be products isn't to to is guys it relationship about but that with Cellerate. training to know from case, add and use. similar That what a approval always probably it'll to the you Very doctors gaining

supply should We problem products. where we then have with these bags. the at have no And point

that I to [inaudible] call, So as in product these waiting mentioned we are the we on just just bags in. resides the need

Ross Osborn

quickly and out training is awareness, market you're think I difficult adopted do to it'll as what process. something too Okay, go or educate a have great. as then going I guess after physicians imagine And be pretty is you to this on far not

Zach Fleming

Our to shows entered or doctor using the familiar market the start market a out of open type something result saline they're normalize cocktail nature. the think backing. of and it and they very this I In to are think it research, been created the sort this that product. with sense category of doctor's doctors that there's historical created the and few And for I scientific over products to look a make consistent consistent. antibiotics the more with years, have a similar then And of

known the sister BIAKŌS, product that our has has as of product, as a course, of is BIAKŌS data product, well. is to Our lot which it wound

standard to on you a into the it's So of it. a with both And we're on out market think site. irrigate also sell surgery, the site way practice and on surgical that's and I wound coming the not mentioned, going the surgical high to way to data help the curve, it's the as

Ross Osborn

your utilization you provide existing more this one higher than And of facilities a or seller product? drive color function seen facility? facilities some of adopt Is can ability have more lastly, right. more then higher on Great, to sales rate per you at

Zach Fleming

the all think I it's above.

were mentioned right more specialties. driving summary the which usage there had comments different doctor of we in So I

accelerate products foldable products. bone our problems We for five facility a we're that biologics of finding line the specialties line as other as well that a of solve within nice So specialties, do have additional lot bone and/ or find synthetics. the multiple utility a and suite

bunch bunch of different surgeries. So themselves lend specialties, a a different to those all of really products

using. by and So surgeons occurring mentioned, both individual you more an used surgeon you more have products which that is

and of facility. kind the we're that per seeing seeing combination there out we're that's why So more

Ron Nixon

in that get would a approvals we we to when approvals by number be expand daily we why that then and the we one see to market get see, site. new to with to the our get going we're as go And get just to other go vast but and be never can linear. Ross, manager region I penetration that's to going as this continue of you can in continue to moment, as expand us, we we as state start a that. linear for we into happens state thing, have to There's we this states the a add more market want is geographic foothold as that XX territorial as that be. all foothold to a pure after, It much at you're

deals to that you managers that territorial products. going in be have from You're said, see these benefit will to and Zach your daily foothold, specialties continue get numerous where as new we is to your movement specialties, and going to our there are then to these the going paramount penetrate you get

Operator

from Lou Your is question coming next with Michael IFCM

Unidentified Analyst

Thanks everyone. question. Hi, my taking for

you seemed it profitability. made getting is question in like first quarter a lot my towards to of the maybe progress So

flow I is that. the past continue guided close on profitable and going that stuff it before you hires R&D like I'm oscillate and working neutral to as as it'll cash think cash to forward do if to think continues or based if flow capital. business, and you in you grow when curious you were the to positive

Ron Nixon

Yes, Michael, I'll take that.

out earlier, our costs get we leverage on on leverage pointed to and McNeil G&A. our continue Mike As fixed

in strategy is goal our profitable, to our structure, as post-acute be absolutely the existing way with even the So well. having we are

Unidentified Analyst

like talked more past And then profitability existing just as there if shifting approvals. focusing too and revenue versus forward. think on sequential maybe know growth normal It you QX. in focusing talking as continue or growing you're fast curious you over penetrating about And rather you past I'm a the at it's about bit than I about grow Thanks. QX. much like seems hospitals going to seasonality in getting just can on just Great. little new rates now towards before, if you're wasn't

Ron Nixon

not when the first Yes, that take paid quarter Zach, surgery because, want their Michael, you've you is just that in there in to that seasonality, deductible you especially operative people hit have got all word yet.

I'll question. you see that. you that so let But, And Zach, take

Zach Fleming

first bit, really exceed in it. by Ron's very happy to fourth Yes, surgical with kind little the we even To quarter, point. a the just unusual quarter, your were space with happy of is

I mentioned to right as we're to are the are quarter. that's it a it on to on I And of year deductibles and trying good a so There's and and waiting And healthy can get jam that do wasn't in it they've don't end I that start No, we point, plan, any we're with they creates, matter. headed have that does business the to but on is in why really do then good you case year it, right use that performance, relieved for their isn't that think, as slowdown your lot And it's the surgeries sign just Doctors that think profitability? patient the year. that focused a And focused at new think been every did closes. to we're think I I order direction. fourth on, the create a in that. on of what of slowdown the the load

maybe I accelerated. like But we're I fact, we it it of growing you But it happy had an expectation where sounds more. are. like really In would with said, say

Unidentified Analyst

And my on next that's great hear. maybe to the then ATM. Yes, question

that about time, hassle short I'm of seems it lot only raised So forward that of of raise process think how sort $X had should it and to curious a going we open and you you period like like just seems that million. for mentioned, I'm the the it thought a on of curious $X million. what was. as like purpose

Ron Nixon

the and was and speaking, it's long. us it It's it for there get the way and we'll really need a very the that and a it think it's because out when to if strategy. us with tool relatively good you've in capital for we served it market. low is good We we purpose efficient But not. actually utilized out that got for a at very first we company a into future it volatile it proved decide or us pleased not that to cost, were a Michael its

Unidentified Analyst

maybe question thanks. And Scendia. Great, my last on

and the sales the How from you Scendia products Cellerate sounds the like time do it Do curious impacted take Allocyte been to have for Scendia comment. vice I you material that's couple process strategy of by see to last to that that is think and So lead we continuing I'm flat could be of sort your long if quarters? base the you stockouts. impact upselling upsell know is start But versa. think place? to before

Ron Nixon

Yes, I think. so problem. no

that with So that. material The Allocyte is bag. happy we product in product really a are

would have had So we available, been seen that growth.

due screening flat quarter to at So result, stockout hasn't business basically something see to actuality, We has but that's fourth Allocyte looking looked since I last as donor in But think and clear. when that it that remember flat. to problem to been for started year. everything that be just you're that a really of number

Operator

We do questions have from some webcast. the

webcast On and Could hospitals question much Your over X%, ASCs? sales slide Previous Tam X. sales sales on mentioned have Q-o-Q growth. you add Any Juan appreciated. grown increase BIASURGE are year? be do continued to from sequential Mike about expect grow an would Roughly some despite Big XX% is why of that Alonzo. had also color you to color decelerating as strong how you next X%, sales and X% growth. Qs right. first

Ron Nixon

part Was that last what? on any color

Operator

Tam. On

Zach Fleming

that market. addressable Yes, I no, what is. Total know

XX% looked well, we and in said, true. our be of would you then QX you that at QX, So by ‘XX, XXXX, grew if

quarter However, that affected in COVID. was by fourth XXXX

you quarter, If at of of the right recall, in that depression was cases terms start available. there a real

So not a great comparison. growth. That XX%

It's where this of records that you very the quarter been happy this date. tell quarter, then really year, would we linear I And month with to each growth quarter. the we're are. So record the month has of first after a new of months a to

really are. I pleased a with slowdown. don't And so there's believe where we

hire the have hiring so in up running. do think waves people, I get business, we and we those

map I And marketplace. seen states amount. or sales you more we're our think around at and is seen, what our XX the in into might a XX,XXX where of penetration additional been have of annually. goal to And grow those states most to have has in you the we're sizable as expand XX

So we've lot on focused a that.

are of that they've so we that bigger buildings, a but grew I We're well. couple that the within mentioned one obviously things and are we're we sizable amount sense. on also dollar working moment percent in is a company, a think Somebody a those and in ago done are focused that process,

And So Mike or it Ron with we're pleased add then else. ahead. may I where would go have we like been to think But If are. anything. something

Ron Nixon

think Thanks. you Zach. I No, covered it, great,

Operator

have Kim. Sean quarter provide growth we how ‘XX? in some able from should current coming the color We QX CellerateRX an additional webcast the be Would to view question you

Ron Nixon

have a and we not roll we so good then will good provided let until predictability, When we get guidance. out we start forecasting anything can looking give predictability. we can quarters on get and No, basis forward doing the just really

Operator

Ian from We IFCM. a with do have Cassel question

Ian Cassel

Yes, the on or InfuSystem’s some I some you update provide was Partnership. if could color wondering

Ron Nixon

I get would partnership is make There's The call and sure a really that lot review just right. continuing InfuSystem’s Yes. advance. technical to of this we what to operational review

and some to may is on clearly it. on a So not forward side moving it's around people look getting lot it our we're but we've focus in that additional really it moving like and forward, brought

to right and it partnership so We to a I to for think take going just time it's one. term. good going it's very do be want And long that

Ian Cassel

sold individually part precision that about care of you question strictly being of strategy? comprehensive your is product healing. that or Do next wound kind see And

Ron Nixon

my that it Yes, because have I from a of is I seen that and Ian, of component overall the I device think is system perspective, strategy part think one just so out value there that based arrangements. devices one have of offs I on analyze on aspects. that impact seen seen have are in able being the certain market, None to I have

think you the I on have entire to And have strategy. we why strategy. that's the entire focused

Ian Cassel

partnership your by hopefully to have Okay, it still and side is a year that goal end? on

Ron Nixon

are we experience in care have wound Yes, drive what that brought in has doing strategy. we another to help is that manager

still partners, implement goal having that And increasing the start are I so impact and value to people execute in the talking about outcomes. I'm and decreasing that able cost to is say can by partners actually actually And is and to find end when year. strategy our based where a of we field us the be

Operator

There further floor remarks. queue to I any back to Nixon be appear Ron turn the like questions closing in this time. for now to no at would over

Ron Nixon

for do this our thank Thank joining And you, you morning. support We you everyone, to us. all for our appreciate call we that really shareholders.

So look forward care. thank Take you speaking and to soon.

Zach Fleming

Thanks, everyone.

Operator

conference conclude This Thank you. does today's call.

may time. for participation. disconnect phone your your Thank have You a lines you wonderful And this at day.

Sanara MedTech (SMTI) 16 May 232023 Q1 Earnings call transcript